Financial Times – European telecoms brace for losses as roaming charges end

A mixture of European officials, lobbyists and politicians will gather in the opulent 17th-century Upper Barrakka Gardens in the fortified Maltese capital of Valletta to toast a long-awaited success on Thursday evening: the end of mobile phone roaming chargesin the EU.

The shindig overlooking the Mediterranean marks the culmination of a decade of wrangling between telecoms companies and politicians, with the high charges for using mobile data abroad becoming history on June 15. Or at least that was the plan.

Dozens of telecoms operators have already applied to be exempt from the roaming rates to avoid a financial hit, according to industry sources. For consumers in some European countries, the abolition of roaming will not happen.

“The EU has been overpromising,” said one person familiar with the debate. “The corks will be popping in Malta anyway, but it’s a Titanic feeling.”

Europe’s largest telecoms companies — such as Orange and Vodafone — will comply with the new “roam like at home” rules, which state that operators cannot levy extra fees for using a mobile abroad.

However, smaller networks, particularly in the Baltic and Nordic regions as well as countries including Belgium, have applied for exemptions to avoid the new rates.

Operators in the Nordics expect a drop of between 1 to 3 per cent in earnings before interest, tax, depreciation and amortisation, according to Bengt Nordstrom, chief executive of Northstream, a telecoms consultancy.

Industry group ETNO had previously estimated that scrapping roaming charges would cost European telecoms groups roughly €7bn in lost revenue by 2020.

While the world is worried about the trend of commoditization, a former Ericsson and Smartone telecoms industry heavyweight is asking what the big deal is. Bengt Nordström, now CEO of consultancy Northstream, can boast of a more hands-off view on the telco landscape, and questions what the panic is all about. Yes, the telcos are [...]Read more